A lawsuit has been filed against eight banks that serve as remarketing agents for Illinois’ variable-rate demand obligations, alleging the banks’ failure to get Illinois issuers the best price on their VRDOs cost them $349 million.
The suit, filed on April 5 by a group of whistle blowers on behalf of the state of Illinois, is seeking triple that amount in damages and penalties. The amount was calculated based upon an analysis of VRDO remarketing business done between 2009 and 2013. The lawsuit said “the pricing scheme existed prior to that date and still continues today.”
Variable-rate securities are long-term ...
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